The NAO Report - Performance Audit – Managing Procurement – Road Construction and Restoration Contracts was laid on the Table of the House of Representatives by the Honourable Speaker in terms of the Auditor General and the National Audit Office Act. 

The report reviewed eleven contracts with final costs of Lm3.3 million, out of a total of Lm19.0 million capital expenditure on roads infrastructure managed by the then Roads Department during the period 2000 to 2002. 

The audit, which was carried out by the Value For Money Section at the NAO, studied the robustness of the public procurement system, focusing on road projects, from initial planning, the tendering process, contract management and control. A case study approach was taken, covering eleven contracts that were planned and implemented over the period 1998 to 2002. This approach enabled the Office to carry out an in-depth study of systems and practices used by the Department of Contracts, the General Contracts Committee and the Roads Directorate.  

The Roads Department approached planning and design in an incomplete manner with initial estimates being significantly inaccurate. The consequence was a net variance between the Roads Department estimates at tender adjudication stage and final costs of the eleven contracts of Lm624,000 out of a total of the Lm3.3 million. Weaknesses in contract management by the Roads Department and the Department of Contracts, apart from the financial aspect, contributed to delays in project completion dates, ranging from 51 days to over 29 months.  

Project completion was further hampered by insufficient coordination between the Roads Department, utilities and key stakeholders. These delays impinged negatively on stakeholders and the end-users. The Roads Department was also found to be in occasional breach of its financial control system.  

The NAO report proposes recommendations aimed at enhancing the procurement system through a concerted effort by the Roads Directorate, the Department of Contracts and the General Contracts Committee. The audit also documented, for the first time, the various stages of procedures through the use of flowcharts. Observations and recommendations in the report may be of great relevance to all procuring systems across the public sector.  

It is understood that these recommendations will be taken up by the Roads Directorate within the Malta Transport Authority (ADT) in its current exercise to restructure the management of Road Construction and Restoration Contracts.